The Volkswagen Group has announced plans to drop XM Satellite Radio in their new VW and Audi vehicles starting with the 2007 model year. The company had previously offered both XM and Sirius, but has now signed an exclusive contract with Sirius through 2012. VW-Audi expect to install Sirius receivers in 80% of its models.

Chance Patteron, a spokesman for XM, downplayed the switch saying that furthering its relationship with VW-Audi wasn"t cost-effective to them and that they already have backing from heavy-hitters in the industry. "XM has long-term agreements with Toyota, General Motors, Honda, Nissan and Hyundai Corp. We evaluated the VW-Audi deal and determined the significant cost didn"t justify the limited volume of vehicles produced."

In other Audi news, the company"s first diesel-powered prototype racer driven by Tom Kristensen, Allan McNish and Rinaldo Capello won the Mobil 1 Twelve Hours of Sebring. This was the R10"s first outing and it will be a force to be reckoned with at Le Mans.